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Age/Earnings Profiles in Transition Economies: The Estonian Case

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  • Kenneth Smith

Abstract

This article examines Estonian age/earnings profiles using 1995 and 1997 Estonian Labour Force Survey data. The results indicate that the overall profile for males is quite different from that of an established market economy. However, the shape of the profile depends on whether one works in the private or public sector. Using regression analysis to decompose wages indicates that conventional human capital theory does not adequately explain the considerable difference between profiles in the Estonian public and private sectors. However, human capital theory provides a better explanation of relative wages in 1997 than in 1994—perhaps indicating a continued adjustment to market processes.

Suggested Citation

  • Kenneth Smith, 2001. "Age/Earnings Profiles in Transition Economies: The Estonian Case," Post-Communist Economies, Taylor & Francis Journals, vol. 13(4), pages 485-503.
  • Handle: RePEc:taf:pocoec:v:13:y:2001:i:4:p:485-503
    DOI: 10.1080/14631370120095675
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    References listed on IDEAS

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    1. Dennis Sullivan & Timothy Smeeding, 1998. "Generations and the Distribution of Economic Well-Being: A Cross-National View," LIS Working papers 173, LIS Cross-National Data Center in Luxembourg.
    2. Francisco H. G. Ferreira, 1999. "Economic transition and the distributions of income and wealth," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 377-410, July.
    3. Orazem, Peter F & Vodopivec, Milan, 1995. "Winners and Losers in Transition: Returns to Education, Experience, and Gender in Slovenia," World Bank Economic Review, World Bank Group, vol. 9(2), pages 201-230, May.
    4. Alan B. Krueger & Jorn-Steffen Pischke, 1995. "A Comparative Analysis of East and West German Labor Markets: Before and After Unification," NBER Chapters,in: Differences and Changes in Wage Structures, pages 405-446 National Bureau of Economic Research, Inc.
    5. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-243, May.
    6. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    7. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, August.
    8. Brainerd, Elizabeth, 1998. "Winners and Losers in Russia's Economic Transition," American Economic Review, American Economic Association, vol. 88(5), pages 1094-1116, December.
    9. Jan Rutkowski, 1996. "High skills pay off: the changing wage structure during economic transition in Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 4(1), pages 89-112, May.
    10. Smeeding, Timothy M & Sullivan, Dennis H, 1998. "Generations and the Distribution of Economic Well-Being: A Cross-National View," American Economic Review, American Economic Association, vol. 88(2), pages 254-258, May.
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    Cited by:

    1. Jens Holscher & Cristiano Perugini & Fabrizio Pompei, 2011. "Wage inequality, labour market flexibility and duality in Eastern and Western Europe," Post-Communist Economies, Taylor & Francis Journals, vol. 23(3), pages 271-310.
    2. Kenneth Smith, 2007. "Determinants of Soviet Household Income," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 4(1), pages 3-24, June.

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